Information meeting SPF participants

2016

1 23-6-2016

Program

Agenda

1. Pension awareness 2. Governance by SPF 3. SPF 2015 4. SPF 2016 Q1 (recent developments) 5. Closing remarks and questions

2 23-6-2016

Participant meeting

Newsletter Website

1. Pension awareness: Collective communication

3 23-6-2016

Personal letters

UPS Pension planner

1. Pension awareness: Individual communication

4 23-6-2016

Help desk Digital Post Age 40/50

Pension meeting

1. Pension awareness: Individual communication

5 23-6-2016

1. Pension awareness: Communication

6 23-6-2016

2. Governance by SPF: Pensions Organisation

Pension contract

Pension administration agreement

Pension Desk

DPS Administrative organization

Outsourcing agreement

Pension regulations

7 23-6-2016

2. Governance by SPF: Pension fund supervision

Board of Trustees

Executive Board Consultative Committees

SPF

Visitation Committee

Accountability council

Accountability

DNB

AFM

Accountant

Actuary

Compliance Officer

8 23-6-2016

2. Governance by SPF: SPF Board

Frank Mortier (Chair)

Guido Croonen(vice-Chair)

Jos van Gisbergen

Arthur Smit

Giselle Verwoort René Witjes

Willem Grin Jo Mastenbroek

Dries Nagtegaal

Marcel Roberts

Employer Employees Pensioners

External professionals

9 23-6-2016

2. Governance by SPF: Accountability Council

Employer Employees Pensioners

John van Moorsel

Theo van den Elshout Paul Eijsbouts

Gerard Tummers

Olaf Tant

Jan Coenen

10 23-6-2016

3. SPF 2015: Amended pension scheme as of 1 January, 2015

Pension accrual changed: from 2.1% to 1.875%

(Indicative) pension age up from age 67 (1st day of month) to age 67 (actual birthday)

Pensionable salary in basic scheme is capped at €100,000

Introduction Net pension scheme (brochure)

100

1 January, 2015

11 23-6-2016

3. SPF 2015: SPF Pensions

Retirement pension Accrual rate 1.875% Partner’s pension Temporary partner’s pension Supplementary partner’s pension Orphan’s pension Disability pension

Sickness

Death

Retirement

12 23-6-2016

3. SPF 2015: What else has happened in 2015?

Harmonization

PPS

FTK

Q1 2015 July 1, 2015 September 1, 2015 November, 2015

CVT

13 23-6-2016

3. SPF 2015: Number of participants

14 23-6-2016

3. SPF 2015: What are the consequences of the new FTK?

• Bigger financial buffers are required to compensate for any disappointments (increased buffer requirements)

• Amended regulations for cuts and indexation (Fund becomes more stable)

• Future-proof indexation

• Catch-up indexation

• Also has an effect on policies on contributions, investments and

solidarity

Pension acrual remains unchanged basically (1.875%), but:

July 1, 2015

15 23-6-2016

3. SPF 2015: Funding level

FL depends largely on interest rate; in recent years, interest rates sharply dropped from 4% to almost 0%. This has serious adverse effects on the funding level

Does SPF own required assets to pay for all its pension liabilities - now and in the future?

16 23-6-2016

Funding level =

The impact that interest rate has on liabilities: • €905 at an interest rate of 1.0% = 1,000 € in 10 years • €781 at an interest rate of 2.5% = 1,000 € in 10 years

Assets Liabilities

Example calculation starting from €1.000 in assets: • 1.0% interest => funding level is 1,000/905 = 110% • 2.5% interest => funding level is 1,000/781 = 128%

3. SPF 2015: (Policy) Funding level

17 23-6-2016

109,8%

109,2%

105,0%

106,0%

107,0%

108,0%

109,0%

110,0%

111,0%

112,0%

113,0%

114,0%

115,0%

dec-14 mrt-15 jun-15 sep-15 dec-15

Policy Funding level

Policy funding level Funding level

3. SPF 2015: Funding level

18 23-6-2016

3. SPF 2015: Policy Funding level

FL depends largely on interest rate; in recent years, interest rates sharply dropped from 4% to almost 0%. This has serious adverse effects on the funding level

Does SPF own required assets to pay for all its pension liabilities - now and in the future?

Full indexation > 130%

110% - 130%

< 110%

19 23-6-2016

Partial indexation

No indexation and risk of cuts

Non-granted supplements - Active participants: 15.14% - Pensioners: 9.21% - Deferred members (sleepers): 9.21%

Non-granted supplements (Former PF SABIC IP) - Active participants: 4.55% - Pensioners: 3.49% - Deferred members (sleepers): 3.49%

3. SPF 2015: Supplements

20 23-6-2016

3. SPF 2015: Return on investments

21 23-6-2016

Benchmark 2015: 0.6%

4. SPF 2016 Q1 (recent developments): Newsflash

22 23-6-2016

The Future of Pensions? Old and young in debate 16 March 2016 Theo Gommer

4. SPF 2016 Q1 (recent developments): (Policy) Funding Level

23 23-6-2016

109,8%

109,2%

106,8%

95,0%

97,5%

100,0%

102,5%

105,0%

107,5%

110,0%

112,5%

115,0%

dec-14 mrt-15 jun-15 sep-15 dec-15 mrt-16

Policy Funding level

Policy funding level Funding level

4. SPF 2016 Q1 (recent developments): Funding level

24 23-6-2016

4. SPF 2016 Q1 (recent developments): Options for the Board

Investments: Risk versus return

Pension accrual and indexation

Fixed contribution 2014 -2018

pension ambition

financing

investment policy

25 23-6-2016

5. Closing remarks

- With a policy funding level of 106.2% the fund is in the “red” zone.

- Recovery plan clearly demonstrates that there are chances to recover within

the time frame allowed by DNB.

- Yet, there still is a chance that cuts may be necessary if the market situation does not recover.

- If interest rate levels do not change, the Board expects that there will not be any indexations in years to come.

- However, the Board trusts that SPF's policy will have positive effects for all participants in the long run.

26 23-6-2016

> 130%

110% - 130%

< 110%

27 23-6-2016

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